Sunday, November 6, 2016

Trump and Corruption Redux

I want to get back to the subject of Trump and corruption, because it is truly mind-boggling that his biggest advantage is claiming that Hillary is corrupt and that, if elected, he will clean up corruption in Washington.  Trump has built his entire business career on fraud.

Trump's General History as a Sleazy Businessman

I will set aside matters like groping women, making crude remarks about his own daughter, and  refusing to pay his nephew's medical expenses as private matters and unlikely to affect the broader public.  But his business career does legitimately rate as "public," and it displays a staggering lack of honesty that dwarfs anything one could say about Hillary.  So, how do they stack up?

Well, for starters, the complaints about Hillary deal entirely with her tenure as Secretary of State and after.  Why?  Well, because everything she did before then was examined with a microscopic to look for any sort of scandal and none turned up.  And let us not forget the reason for the whole e-mail scandal in the first place.  Congressional Republicans were investigating the attack on the US consulate in Benghazi, looking for dirt to dig on then-Secretary of State Hillary Clinton.  Ultimately, they failed to find anything she had done wrong at Benghazi, but did find that she had improperly made State Department e-mails from a private server.*

Trump, by contrast, has quite a past.  He began working in New York construction in the 1970's and was strongly suspected of Mafia ties.  Well, one may say, everyone knows that in New York in the 1970's the construction industry was rife with Mafia and anyone who didn't make certain payoffs would never be able to build anything.  But there is ample evidence that Trump's connections went beyond what was necessary.  He was one of the few New York construction magnates to use ready-mix concrete.  This was highly significant because any delay in pouring the concrete would cause it to harden and halt construction.  Avoiding such delays meant being on good terms with the concrete union which was, of course, Mafia controlled.  Trump paid inflated prices, presumably the payoff that kept him on good terms.  When the Mafia-controlled concrete union called a general strike, the Trump Tower was spared.  When Trump moved into Atlantic City casino construction, he was suspected of further Mafia payoffs to to purchase the necessary land.  Trump also made use of illegal Polish immigrants to work twelve-hour days conducting demolitions with sledge hammers and then stiffed them of much of their pay.  New York unions did not protest these abuses, probably because of the Mafia payoffs.

Well, one may say, so Trump made Mafia payoffs at a time when there was no other way to get anything done in construction.  But he has moved past that by now.  And, indeed, as the Mafia's power waned, Trump stopped working with them.  But he continued making a general practice of fraud.  USA Today has famously documented his habit of stiffing contractors, knowing that if they sue they will be up against someone to large to fight and will have to settle for a fraction of what is actually owed.  Is this a common practice in the construction industry?  How commonly did he do it? Well, the New Jersey casino commission found that he owed $69.5 million to 253 sub-contractors for the Trump Taj Mahal.  Is this a common practice in the industry?
Developers with histories of not paying contractors are a very small minority of the industry, said Colette Nelson, chief advocacy officer of the American Subcontractors Association. But late or missing payments can be devastating for small businesses and their employees.
To give some idea of just how not-typical Trump is in the field, USA Today compared him with five other major real estate executives and found that Trump had more lawsuits than the other five combined.

Then there is the matter of Trump's bankruptcies, not all of which I can follow.  Two things matter, though.  For one, when Trump's Atlantic City casinos proved unsustainable, he turned them into a publicly traded company.**  This gave him a fiduciary duty to shareholders.  He nonetheless ended up looting the company, using it to pay off his private debts and pay himself a huge salary and bonuses.  When the company failed, he shareholders were left holding the bag.  The other is that he claimed a nearly one billion dollar loss from the whole operation.  This was legally dubious because the immense losses were offset by comparable levels of debt forgiveness.  This is supposed to be taxable income, but Trump apparently exploited a loophole that allowed him to exchange debt forgiveness for equity in his partnership.  Except, says a tax expert the loophole was not so much "exploited" as "stretched beyond any recognition."  Since losses of this type can be offset against future income, Trump has probably used it to avoid paying taxes for years on end.  No wonder he has been under audit by the IRS for years on end!

Well, all right, the Trump supporter might say, so Trump's Atlantic City days were sleazy.  But he has gotten out of the casino business by now, so those days are behind him.  And that is true.  Trump has moved on now to entertainment.  And that is true.  Having failed at making actual, physical things, Trump has moved on to reality TV and to monetizing his name as a brand.  What he has not done is move on to running an honest business.  That impassioned foe of illegal immigrants stealing jobs from Americans brings in models on a tourist visa, without a work visa, and then takes back most of their pay by charging exorbitant and fees.  Since they are working here illegally, the models dare not protest.  Once again, this is a common practice in the industry, but one seasoned model says of the Trump Agency,  "Honestly, they are the most crooked agency I've ever worked for, and I've worked for quite a few."  And he runs plenty of other scams bilking the gullible, most notably Trump University, which claimed to teach the secret of how to get rich quick, but actually just took people's money and taught nothing of any value whatever.  Trump Institute is essentially the same thing by a different name.  And so forth.  Indeed, twenty days after the election, trial will proceed in a suit by Trump University payors wanting their money back.  The judge very properly postponed trial until after the election lest it (1) take too much of his attention away from the campaign and (2) bias the results.  If only the FBI would do the same!

Criminal versus Civil Wrongs

Well, all right, the Trump supporter may say, these things are crooked.  But Trump is merely facing civil liability for them.  No one has charged him with an outright crime.  Hillary sending State Department e-mails on a private server was criminal.  Suffice it to say that if you can make the argument that all the Trump actions described above were bad but not criminal, the same can certainly be said of Clinton's e-mails.  Bush Administration lawyer Jack Goldsmith explains:
The prosecution would be entirely novel, and would turn in part on very tricky questions about how email exchanges fit into language written with physical removal of classified information in mind. Though he did not say so explicitly, Comey might have concluded that a conviction in this context was, for many reasons, unlikely—a clear reason not to prosecute.
He also says that Clinton's actions are clearly grounds for non-criminal punishment such as loss of access to classified information or firing.  Or, as this veteran national security reporter explains:
People simply don't get indicted for accidental, non-malicious mishandling of classified material. I have followed leak cases for a very long time, both at the Washington Post and since starting Lawfare. I have never seen a criminal matter proceed without even an allegation of something more than mere mishandling of senstive information. Hillary Clinton is not above the law, but to indict her on these facts, she'd have to be significantly below the law.
He goes on to approvingly quote FBI Director James Comey:
In looking back at our investigations into mishandling or removal of classified information, we cannot find a case that would support bringing criminal charges on these facts. All the cases prosecuted involved some combination of: clearly intentional and willful mishandling of classified information; or vast quantities of materials exposed in such a way as to support an inference of intentional misconduct; or indications of disloyalty to the United States; or efforts to obstruct justice. We do not see those things here.
And finally:
A common refrain in discussions of the Clinton case has been that “anyone else” would have been charged in similar circumstances. Yet if you look closely at the supposedly parallel cases where lower-ranking individuals have been prosecuted for mishandling, you find that invariably the circumstances aren’t similar. You’ll find prosecutions involving classified material knowingly and intentionally provided to uncleared persons (as in the case of Gen. David Petraeus), or where large quantities of documents were literally removed from secure facilities, but I haven’t turned up any cases where conversations about classified subjects on an insecure line have been treated as a criminal matter. In a country where literally millions of individuals hold top secret clearances, we may safely assume this is not because such indiscretions never occur, but because they had not been understood to be criminal acts, and were dealt with as matters of administrative discipline.
In short, as with Trump, the actions are wrong but not criminal.  And if Trump were subject to the degree of scrutiny that Clinton has been -- to four years of Congressional investigation intended to dig something up, and now to hacking by Russia and publication by Wikileaks, it is entirely possible that they might reveal something criminal as well.

Deleted E-mails

But Hillary did make efforts to obstruct justice, a Trump supporter might say.  What about the 33,000 e-mails she deleted?  These appear to have been e-mails she believed were personal and that she was therefore not required to turn over.
To determine which emails were work-related, a member of Clinton’s legal team did four things: she automatically deemed any email sent from or to a .gov and .mil address as related to work; she searched the tens of thousands of emails for names of senior State Department officials, lawmakers, foreign leaders and other government officials; she conducted a keyword search for work-related terms; and she looked at the sender, recipient and "subject" of every email for other potentially work-related emails, but she did not read the contents of those emails.
Nonetheless, the process was not infallible.  Of the 33,000 emails Hillary deleted, the FBI has recovered some 17,000 and found that "many" were work related.  (Exact figure not given).  The total she did turn over were 30,000, consisting of about 55,000 pages.  Given the volume, it is certainly plausible that that error, not intentional deception, was at work.  In the meantime, it would appear that Trump Enterprises is in the regular habit of destroying e-mails and documents it is under court order to produce, and has been doing this sort of thing since 1973.  (Obviously there were no e-mails back then, only documents).  And, granted, this has been in civil rather than criminal, investigations.  But honestly, any claim of superior ethics by Trump is starting to look mighty thin by now.

Foundation Scandals

Well, what about that sinister Clinton Foundation and its corrupt dealings?  All right, I don't really have time to get into the weeds here, so this is just a thumbnail sketch.  The Clinton Foundation is unusual in that it does not normally give grants.  It employs its own front line charity workers, finances other charities under its umbrella, and seeks to arrange partnerships between other organizations, including some that are for-profit.  That is what it does.  How is it financed?  Mostly by donations, some by the Clintons (obviously), many by wealthy donors, and a non-trivial number by foreign individuals, entities and governments.  The basic, underlying scandal here is that Hillary raised funds for her foundation while serving as Secretary of State, she met with many donors, any this creates at least the appearance that donors may be buying access in exchange for donation (although there is no evidence that any of them have been given any specific favors beyond a meeting).  Is any of this sinister? I outsource to Inside Philanthropy:
The latest red-hot story from the Associated Press is a case in point. It breathlessly reports that over “half the people outside the government who met with Hillary Clinton while she was secretary of state gave money — either personally or through companies or groups — to the Clinton Foundation.” 
A tweet by the AP boiled the point down further: “More than half those who met Clinton as cabinet secretary gave money to Clinton Foundation.” 
How many people is the AP talking about here? All of 85, out of 154. Okay, now just take a moment to think about how absurdly misleading this claim is: Did Hillary Clinton really only meet with 154 people during her years at State that were “outside the government?” Of course not. She probably met with thousands, starting with innumerable foreign officials as she circled the world.
. . . . . .
Weirdly, it never occurred to the AP reporters to cross-check the donors to the Clinton Foundation with the donors to Hillary’s political career. There’s huge overlap here, since it turns out that many of the people who have faith in the Clintons as political leaders also believe in their nonprofit work. Certainly, there are some donors in this mix with more transactional motives. Welcome to the world of politics, which, in the case of the Clinton Foundation, has become enmeshed in the world of philanthropy. 
The obvious potential for conflicts here is why the Clinton Foundation probably should have been mothballed long ago, and should be soon, if Hillary wins the presidency. As I’ve said before, balancing the foundation’s fundraising with Clinton’s presidential ambitions was a very bad idea. 
But let’s not pretend that this foundation is somehow a unique example of the corruption of philanthropy by politics. These two worlds intersect all the time.
 Examples, some far more blatantly political, follow.

Meanwhile the Trump Foundation, besides fairly conventional charitable giving, has used foundation funds to pay charitable donations Trump has been ordered to pay in lieu of fines and to bid on Trump memorabilia in charity auctions.  And, as before, this is not just how business is done.  A lawyer who gives tax advice to charities calls these examples of self-dealing "really shocking" and says, “I represent 700 nonprofits a year, and I’ve never encountered anything so brazen.”  And then there is the matter of the $25,000 donation the Trump Foundation made to the Florida Attorney General at a time her office was considering whether to investigate Trump University.  Days later, the Attorney General decided not to investigate.  Now obviously it can be just about impossible.  Yet the uproar over corruption in the Clinton Foundation is over the possibility of the mere "appearance" of impropriety.  That appearance is a whole lot stronger here.  Furthermore, it clear is that (1) a charitable foundation is not permitted to make donations to political campaigns and, (2) the donors knew that donations of this kind are forbidden and attempted to disguise it as a charitable donation.***

Double Standards

To many Trump supporters, the real complaint about Hillary and the e-mails is that she did anything particularly heinous as that she got away with it, while little guys are prosecuted for less heinous offenses.  Hence there is a double standard -- our ruling class gets away with things that regular folks are prosecuted for.  I have dealt above with why that is not the case for Hillary Clinton.  To which I would add, and for this you want to elect DONALD TRUMP?!?!?!  His whole career has been based on being too big and powerful for little guys to fight.  He has stiffed small contractors, hired illegal immigrants, destroyed, documents, manipulated the tax code, and taken countless other actions that, at best, stretch the law to an unrecognizable degree, all secure in the belief that he had enough resources to outlast and outfight any attempt to call him to account.  Anyone who is angry (and I think there is good reason to be) that our ruling class is not bound by the same laws as the little guy, then Donald Trump is the very embodiment of this failing, not the person to fight it.

Trump has Turned Over a New Leaf

The usual response to this by Trump and his followers is that sure, he knows more about gaming the system than anyone else, and that makes him the perfect person to catch all the people who game the system and fix it so it can't be gamed again.  Maybe it is overly cynical to argue that you can't teach an old dog new tricks and a leopard won't change its spots, although it is Trump who has been warning about the dangers of trusting a snake, since it cannot be other than what it is.  Still, like the bleeding heart that I am, I believe that people can change.  But anyone making the claim to have changed in such a spectacular degree, that he will abandon a long career of ripping off the little guy and champion the little guy instead had better offer some sort of evidence to support that claim.  Well, Trump threatens to investigate judges who rule against him and to bring libel and anti-trust actions against media outlets that criticize him; he overpays with his donors' money to use Trump products on his campaign; he continues to sue foreign guest workers at his resort; and he stiffs people working for his campaign from child musicians to his own pollster.  So, no, this old dog is still playing the same tricks.  This leopard hasn't changed its spots.  This snake will bite you if you take it in.  And to believe that Trump hasn't changed now but miraculously will by January 20, 2017 goes beyond naive folly to sheer madness.

National Security.

The final refuge of Trump supporters to all this is that, okay, Trump may be crooked and corrupt, but at least his actions never endangered national security.  To this I would have to say, you have me there.  Trump has never endangered national security.****  That is because he has never had the opportunity.  One reason he has never had the opportunity is that Trump is such an obvious security risk that it would be sheer madness to allow him anywhere near classified material.  Or let's put it this way.  Hillary's mishandling of classified material has been held to be "extremely careless."  Now imagine our national security depending on Donald Trump's carefulness.  (Shudder!)

I would have the same response, by the way, to a few of Hillary's left wing critics who see Trump as the lesser evil.  Their basic reasoning is that Hillary has been Obama's Secretary of State, supported his most interventionist policies, and argued for even more interventionist ones.  She therefore has blood on her hands.  Trump, by contrast, has never had any role in foreign policy whatever and his hands are therefore clean.  Look, I agree with people who dismiss the whole idea that we should never consider people's past but only the future.  Otherwise there would be no need for a criminal justice system.  What people have done in the past is a reasonable predictor of what they will do in the future.  If I had to make an apples-to-apples choice between two candidates who had had comparable influence on US foreign policy in the past and who advocated similar policies in the future, I would choose one who had advocated a less bloody approach rather than one who advocated a more bloody approach.  Possibly I might even reject one who had a bloody past but had seen the error of his/her ways because of that past, although it would depend on the alternative.  But if the choice was between someone who had made some very bad decisions in the past and might make more in the future and someone who obviously had no experience or meaningful knowledge of foreign policy and was such a loose cannon as to make almost anything possible -- well, I would go for the former.

Tu Toque

In the end a Trump supporter -- or others as well -- might finally accuse me of the tu toque fallacy.  Whatever Trump's failings, they still don't excuse Hillary's e-mails.  And granted.  But when choosing a President, we have little choice but to grade on the curve.  If you are arguing that one person's transgressions are justified, pointing out someone else's transgressions is irrelevant.  But when choosing which of two people to elect as President (and, given the binary nature of US politics, two is all you have to choose from) then, yes, it matters whether one candidate's transgressions are more serious than the other's.  And in this case, I think there can be no doubt about it.

*To anyone old enough to remember the Bill Clinton presidency, this sounds familiar.  Bill Clinton came into office not long after a real estate bubble had burst, causing many Savings-and-Loans to fail.  The Clintons had invested in one such company, the owner having ended up in jail for dubious financial activities.  Congress started investigating and hired a special prosecutor to find something impeachable.  He never did find anything impeachable involving the Savings-and-Loan, but did learn that Bill had lied in a civil deposition, so Congress impeached for that instead.  The same script is now playing out with Hillary
**This was Trump's only publicly traded venture; all the others have been closely-held, which has allowed him to escape public scrutiny.
***The campaign fundraising organization called itself "And Justice For All" (all initial letters capitalized), a reasonable name for someone running for Attorney General.  Foundation reported on its tax report that the donation was to "Justice for All" (no "And"), a Kansas church group.  Yet the donation was mailed directly to the political campaign.
****I am not one who believes these conspiracy theories about Trump being in the tank for the Russians, although the Russian intelligence service does appear to be in the tank for Trump.

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